Stock Market Updates July 2022

Markets turned bullish in July 22 with BSE Sensex jumped around 9% to close at 57,570 as against 53,019 in June 22 and Nifty closing at 17,158 as against 15,780 in June 22. Markets are bullish on account of strong corporate earnings, foreign funds inflows, fall in crude oil prices and improvement in inflation numbers.

• After nine consecutive months of selling, the foreign investors turned net buyers for the first time in July 22. The FPI’s invested Net Rs. 4989 Crore in Equity in July 22 as against net outflow of over Rs. 50,000 Crore in June 22.
• The net outflow by FPIs from equities this year so far has reached a record high of Rs 225 thousand Crore. For reference, in 2008 crisis, FPI had withdrawn around Rs. 50 thousand Crore from Indian markets.
• The reasons for FIIs coming back could be many fold. Global cues are becoming favorable as the central banks are now likely to go slow on rate hikes. At the same time, Indian economy is also doing well along with decent corporate earnings in Q1 FY23 making Indian market attractive for FIIs, which are sitting on cash.

• 5G auction ended in July with Jio being the largest bidder with bids of Rs. 88000 Crore followed by Airtel Rs. 43000 Crore and Vi Rs. 18,800 Crore. Adani also brought a small Rs. 200 Crore spectrum indicating it is for captive consumption.
• Reliance Industries Ltd. posted record profits in Q1 of FY23 (46% increase in net profit y-o-y to Rs. 19,443 Crore) with jump in earnings in oil refining business. The prices of Crude had gone up post Russia-Ukraine war and company could perform well in highly volatile market. RIL’s other than oil refining businesses like retail and telecom also did well.
• ONGC also posted strong Q1 results with profit jump to Rs. 15,206 Crore (251% increase y-o-y).
• Chemical companies posted strong Q1 profit numbers with sales rising by more than 40% in most of the larger companies due to higher demand and disruption in global supply. While chemical industry saw volatility in raw material prices, number of larger players like SRF, Deepak fertilizers, GHCL, Gujarat Fluorochem and Meghmani posted strong profits.
• PE funds Advent and Carlyle will infuse around $1.1 Billion in Yes Bank for stake of around 10% each. The investment was approved by board of bank and in principally by RBI.

Primary market Update:

There were no new IPOs in July 22 as against two main board IPOs in June, of eMudhra Limited and Aether Industries Limited. However with markets again becoming bullish the new IPOs should start again. The IPO of Electronics Manufacturing Services (EMS) firm Syrma SGS Technology Ltd. is lined up in August 22.

Acknowledgements: 

RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)

Disclaimer:

This material has been prepared by the personnel in Vora Corporate Finance which is Investment Banking arm of Vora Management Consultancy Private Limited and looks after Mergers & Acquisitions (M&A), Private Equity (PE), Fund Raising, Debt syndication and Valuations and is based out of Ahmedabad, Gujarat, India. Any views or opinions expressed herein are solely that of individual authors and may differ from view of Vora Management Consultancy Private Limited. This material is proprietary to Vora Management Consultancy Private Limited and is for your personal use only. Any distribution, copy, reprints or forward to others is strictly prohibited.

This material captures the information based on information available in the public domain, public announcements and sources believed to be reliable. Analysis contained herein is based on publicly available information and appropriate assumptions. This material is intended merely to highlight market developments and is not intended to be comprehensive and does not constitute strategic, investment, legal or tax advice. In no event Vora Management Consultancy Private Limited be liable for any use by any party or for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you for evaluating any transaction. 

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